How to Set Up Bank Feeds in Xero

Welcome to the Fit Small Business Xero training course! In this lesson, we’re going to cover how to set up bank feeds in Xero.

You can follow along on your own Xero account. If you don’t have one already, click here to sign up for a free 30-day trial. Fit Small Business readers also receive 50% off their first three months if they decide to subscribe.
To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin!

For some small business owners, Xero will provide enough tools to handle their books all on their own. But, for many, it makes sense to use Xero in conjunction with experienced small business accountants who are also Xero experts, like those at Bookkeeper360.

Why Is It Important to Set up Bank Feeds?

Most of the purchases that you make for your business are either deducted from your bank account or charged on a business credit card. Therefore, to ensure that every transaction has been included in your financial statements, you should set up all business bank and credit card accounts with an automatic bank feed that will import your bank and credit card transactions into Xero.

By setting up an automatic feed, it will save you time that you would have spent manually entering transactions from your bank/credit card statement into Xero. First, let’s discuss the 3 ways that you can import bank and credit card transactions into Xero.

3 Ways to Import Bank and Credit Card Transactions into Xero

You have 3 options when it comes to importing bank and credit card transactions into Xero:

1. Direct Feeds

Direct feeds allow you to automatically download bank and credit card transactions into Xero from your bank or financial institution. The banks listed below currently support a direct feed to Xero.

City National Bank

Silicon Valley Bank (US)

Wells Fargo

If you use one of the following banks, then you can head over to the Direct Feeds section for step-by-step instructions on how to set up a bank feed. If you do not use one of these banks, then read on.

2. Yodlee Feeds

If you don’t bank with one of the three financial institutions listed above, you will use a third party called Yodlee to download your bank/credit card transactions. Yodlee integrates with Xero to connect thousands of online banking websites and financial institutions worldwide. Most small and larger financial institutions allow Yodlee bank feeds. Note: While Xero does not charge to setup these type of feeds, your bank/financial institution may charge you a fee for this service.

Despite the fact that they’re a 3rd party service, setting up a Yodlee feed is just as easy as a direct feed. We provide step-by-step instructions for this below. Like direct feeds, Yodlee feeds will update your bank transactions at least once per day.

3. Import a Bank or Credit Card Statement

If you are not able to set up a direct feed or a Yodlee feed for your bank/credit card account, then you can import your monthly bank/credit card statements into Xero from a file. In order to do this, you will need to request an electronic copy of your bank/credit card statement in one of the following formats. The formats that work the best are marked with an asterisk (*).

OFX*

QBO*

QFX*

QIF

CSV

How to Add a Bank or Credit Card Account & Download Transactions

The only users that can add a bank (credit card) account are the Standard user and the Advisor. To learn more about user permissions, check out our How to Invite a User lesson for more details.

Below are step-by-step instructions on how to set up direct feeds, Yodlee feeds, or import a bank/credit card statement.

Direct Feeds

Below, are the steps that you need to follow to set up a direct feed for a bank or credit card account.

Step 1 – Navigate to Bank Accounts

From the Accounts menu, select Bank Accounts as indicated in the screenshot below.

Step 2 – Find your Bank

In the search box, type the name of your bank/credit card as indicated in the screenshot below. Note: Your bank may be listed several times so be sure to select the correct one.

Step 3 – Proceed to Login and Connect Accounts

Step 4 – Enter Bank (Credit Card) Account Details

Next, you will see the login screen for your bank or financial institution. Enter your login ID and password and then click the “Sign On” button as indicated below.

Step 5 – Select the Bank or Credit Card Accounts that you would like to connect to Xero

In the next screen, you will see a list of bank accounts that are available for a direct feed. You can select accounts individually or select all accounts. (Note: Account information not shown in the screenshot below to maintain privacy.)

Step 6 – Option to Connect new Accounts Automatically

You have the option to connect any new bank/credit card accounts that you open at the same financial institution, using the same login credentials. Note: This option is automatically selected so be sure to remove the checkmark if you don’t want to set this up. Click the “Continue” button as indicated below.

Step 7 – Confirm Accounts

In the next screen, you will see a list of accounts that will be set up with a direct feed to Xero. You must accept the terms and conditions and then click the “Connect my Accounts” button to proceed.

Step 8 – Access Bank or Credit Card Accounts from Xero Dashboard

After you have set them up, your bank/credit card accounts will appear on the Xero Dashboard so that you can easily keep an eye on them as indicated in the screenshot below:

Yodlee Feeds

Similar to direct feeds, the steps for setting up a Yodlee feed for a bank/credit card account are identical. Below, are the steps that you need to follow to set up a Yodlee feed for a bank/credit card account.

Step 1 – Navigate to Bank Accounts

From the Accounts menu, select Bank Accounts as indicated in the screenshot below.

Note: If you have not set up a bank account yet, from the Xero dashboard you may have a button that says Add bank account similar to the screenshot below:

Step 2 – Find your Bank

In the search box, type the name of your bank/credit card as indicated in the screenshot below. Note: Your bank may be listed several times so be sure to select the correct one.

Step 3 – Enter Bank (Credit Card) Account Details

You will need to enter an account name, the bank/credit card account number and the currency as indicated in the screenshot below.

Account Name: Enter the name that you would like to use to track this account in Xero. Note: If you have more than one business checking account, be sure to use the name of the account and maybe the last four digits of the account number as the account name (i.e. Bank of America, X1234.)

Account Number: Enter the full account number in this field.Note: Do not include any slashes or dashes in this field.

Currency: Select the currency that you would like to use to track the bank/credit card activity. One of the many benefits of using Xero is that it has a robust multi-currency feature that allows you to track foreign bank and credit card accounts. Check out our multi-currency lesson to learn more about how this works.

Continue: Once you have completed all 3 fields, click the “Continue” button.

Step 4 – Log into your Bank Account to Activate Bank Feeds

In the following screen, you will need to log into your bank/credit card account.

Online ID and Passcode: Enter the login ID and passcode that you use to log into your bank account.

Automatic Bank Feeds Terms & Conditions: Click the blue link to read the terms and conditions and then put an X in the box to accept the terms & conditions that you read.

Click Next: Once you click next, Xero will connect to your bank account. You will see the following message:

Step 5 – Select the Bank Accounts that you would like to activate a bank feed

Below, we have provided a screenshot along with a brief description of the selections that you need to make next.

Select the matching bank feed – From the dropdown, select the bank/credit card account that you would like to set up an automatic bank feed for. Unlike direct feed, you have to individually select the bank/credit card feed and repeat the process for each bank.

Import Transactions starting from – From the dropdown, select the start date that you would like to begin downloading transactions from. Note: This will be determined by how far back your bank/credit card company will allow you to go back and download transactions.

All available transactions – By selecting this option, Xero will download up to 3 months worth of transactions.

Cancel Activation – You can cancel bank feeds at anytime for any bank/credit card account.

Click the “OK” button once you have made your selections.

Step 6 – Confirm Bank Feed Activation

You should see the following message confirming the activation of the bank feed. As indicated below, you will receive a notification once all of your bank/credit card transactions have downloaded. Note: This process can take anywhere from a few minutes up to 1 hour.

Step 7 – Access Bank/Credit Card Accounts from Xero Dashboard

After you have set them up, your bank/credit card accounts will appear on the Xero Dashboard so that you can easily keep an eye on them; see screenshot below:

Step 2 – Import your file into Xero

A. Navigate to Accounts and select Bank Accounts as indicated in the screenshot below.

B. Click on the “Manage Account” button and select Import a Statement as indicated in the screenshot below.

C. Click on the “Browse” button in step 3 and locate your saved file as indicated in the screenshot below. Once you have located your file, click the “Import” button to proceed with the import.

Note: In the screenshot below, the second step shows you the date and the amount of the most recent transactions imported. This can be helpful to ensure that you know your starting point for the next file import.

How to Edit a Bank/Credit Card Account

If you need to make changes to a bank/credit card account, you can do that from the bank accounts screen or from the chart of accounts. In this lesson, we will show you how to edit a bank account from the bank account screen.

To edit a bank/credit card account, follow these steps:

Step 1 – Navigate to Bank Accounts

From the Accounts menu, select Bank Accounts as indicated in the screenshot below.

Step 2 – Navigate to Edit Account Details

Click on the “Manage Account” button and select Edit Account Details as indicated in the screenshot below.

Step 3 – Edit Bank Account Details

In this screen, you can edit the account name (as it appears in Xero) and the bank/credit account number as indicated in the screenshot below. Once you have made the changes, be sure to save your work.

If you close a bank/credit card account, you can delete it in Xero if you have never posted any transactions to it. However, if you have posted transactions to a bank/credit card account then you will not be able to delete it because of the impact it will have on your financial statements.

Instead, you can archive an account that you no longer plan to use; this will remove the account from the chart of accounts list and any account dropdown while working in Xero. However, it will still appear on financial statement reports.

Later on, if you decide to use the account again, you can easily restore (unarchive) an account that was previously archived. For step by step instructions on how to delete, archive or restore bank/credit card accounts, watch ourHow to Set Up a Chart of Accounts lesson.

About the Author

Crystalynn Shelton

Crystalynn Shelton is a CPA and staff writer at Fit Small Business, specializing in small business Bookkeeping, Accounting, and Taxes. She is also an Adjunct Instructor at UCLA Extension where she has taught hundreds of small business owners how to setup and manage their books using QuickBooks for 8 years. Prior to joining Fit Small Business, Crystalynn was a Senior Learning Specialist at Intuit for 3 years and also ran her own QuickBooks consulting and training business. When Crystalynn isn’t writing or teaching, she enjoys rollerblading in Venice Beach and reading a good book.

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